Approve in principle - what rate

B

Bruze

Guest
Hi,


This is a scenario that i reckon i might find myself in over coming months.

i plan on visiting a mortgage broker in next few weeks and completing buying process up until "approval in principle".

lets say the product we picked at this stage was 100% mortage at a 2yr fixed rate of 3.4%

Lets say we find a property we like (new) and deal closes in July.

what happens if there is an interest rate hike in between (perhaps april)?

all the banks i presume would adjust their rates but would the rate that i had agreed still be valid?


Cheers,

Des
 
AFAIK, no - you get whatever the rate is on the date you close.

For instance, if you were offered 3.08% 1 yr fixed now and the 1yr fixed went up to 3.75% by July, you would fix at 3.75%.

However, bear in mind that you can change your selected rate up until you require the cheque.
 
Yeah exactly what sun sparks says, the only way the rate will be the same is if it is "fixed until" ie states fixed at 3.7 until March 2008, however if you drawdown in say November 2006 you get 1 yr 4 mths fixed, otherwise its the prevailing rate.
 
I have read that you can "book" the rate you agree with the bank so when it comes to drawdown date you get the rate you agreed rather than what's current. There have been other threads about this I think.
 
what about variable or tracker rates ? Do they change?
My offer letter set my rate at 2.5% for the first year (12 month discount variable)
just got my first statment and the rate is 2.75%
i was going to ring ICS about it - should I?
 
thanks all, il put my nect out when the time comes and try and book a rate.

cheers
 
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